Correlation Between Metalurgica Gerdau and Intuitive Surgical

Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Intuitive Surgical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Metalurgica Gerdau and Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metalurgica Gerdau SA and Intuitive Surgical, you can compare the effects of market volatilities on Metalurgica Gerdau and Intuitive Surgical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Metalurgica Gerdau with a short position of Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Intuitive Surgical.

Diversification Opportunities for Metalurgica Gerdau and Intuitive Surgical

-0.4

Correlation Coefficient

Metalurgica Gerdau  Intuitive Surgical

Very good diversification

The 3 months correlation between Metalurgica and Intuitive is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical and Metalurgica Gerdau is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Metalurgica Gerdau SA are associated (or correlated) with Intuitive Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Surgical has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Intuitive Surgical go up and down completely randomly.

Pair Corralation between Metalurgica Gerdau and Intuitive Surgical

Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 1.14 times more return on investment than Intuitive Surgical. However, Metalurgica Gerdau is 1.14 times more volatile than Intuitive Surgical. It trades about 0.12 of its potential returns per unit of risk. Intuitive Surgical is currently generating about -0.05 per unit of risk. If you would invest  851.00  in Metalurgica Gerdau SA on April 25, 2025 and sell it today you would earn a total of  112.00  from holding Metalurgica Gerdau SA or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Metalurgica Gerdau SA  vs.  Intuitive Surgical

Metalurgica Gerdau

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metalurgica Gerdau SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Metalurgica Gerdau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intuitive Surgical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intuitive Surgical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Metalurgica Gerdau and Intuitive Surgical

The main advantage of trading using opposite Metalurgica Gerdau and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Intuitive Surgical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Intuitive Surgical will offset losses from the drop in Intuitive Surgical's long position.

The idea behind Metalurgica Gerdau SA and Intuitive Surgical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.